How do you buy cryptocurrencies?
This part is pretty straightforward. You go to Coinbase, verify yourself with them, give them money and you get your first cryptocurrency!
Which cryptocurrency do I buy?
This is a pretty personal question and I’ll start by saying that on Coinbase, right now, you only have 4 choices.
- Bitcoin Cash
These are some pretty good choices to have, however it is only 4 options. To understand what these are and do you need to understand a little about what a blockchain is and a little on how it works.
You can go to my page here and see “What is a blockchain”.
But in a nutshell, Bitcoin is digital money and people liken it to gold. Ethereum is like oil in that it has a utility purpose, it performs work on a blockchain where people make applications, and Litecoin is digital money and people liken it to silver. So if you want a currency you buy Bitcoin or Litecoin, if you want a digital oil you buy Ethereum. Another good strategy is to buy all of them!
Now if you want to get involved with the other currencies you are going to have to take whatever coin you decide to buy and transfer it to another wallet, either on an exchange or a coin changing wallet.
What do I do with my coins after I have them?
Before you buy your cryptocurrency most people know if they want to hold their coins for a few years, and others know that they probably want to trade actively in the crypto space.
For those of you who want to hold you will probably want to hold your coins in your Coinbase account, again, it is insured by their insurance policy and the US dollar portion of your account is FDIC insured. If you want to hold your coins yourself you have a few options:
- Cold storage and paper wallets
- Hardware wallets
- Private key holding devices
How do I trade cryptocurrencies?
If you decide that you want to trade cryptocurrencies you have several options, below is a fairly comprehensive list of good exchanges in no particular order
There are dozens of exchanges, however these are some of the larger ones, fees vary with Coinbase being the most expensive and GDAX, Changelly and Shapeshift being the least expensive.
In order to trade your coins on another exchange, you have to move your coins from Coinbase over to these exchanges. You will have a wallet address in each exchange, and you must transfer to these addresses prior to you making transactions, it takes time to move coins and depending on what coin you chose to buy it can take anywhere from 20 minutes to several hours to move coins between wallets, this also will depend on network bottlenecks.
What is next?
From here you need to get educated in whatever of investing or trading style that interests you. Read up on the technology, each coin and be prepared to be sucked in because this stuff is fun!